Christiana Cos. to Acquire F.A.O. Schwarz Toy Chain
Christiana Cos. said Thursday that it has signed an agreement to buy F.A.O. Schwarz, the New York-based retailer of upscale children’s toys, for an undisclosed amount of cash.
Schwarz, which is part of a U.S. holding company owned by privately held Franz Carl Weber International, a Zurich, Switzerland-based retail toy chain, reported 1984 sales of about $20 million. Founded in 1862, Schwarz is best known for the unusual toys that it sells to middle- and upper-middle-income customers.
The chain has about 200 employees at 22 stores around the country, including its flagship store on New York’s 5th Avenue and stores in Costa Mesa’s South Coast Plaza, San Francisco and Sacramento. Schwarz also does some catalogue sales.
“The acquisition will be funded though internally generated funds,” said John H. Roberts Jr., who in February became chairman of San Diego-based Christiana. “We’ve sold a couple of (real estate) assets and are selling some others. We felt the time (was) right for this acquisition, and the assets are ripe” for disposal.
The Schwarz acquisition, which Roberts hopes to conclude in early July, followed Christiana’s purchase in April of the Remington Club, a senior citizen residential community in Rancho Bernardo. At that time, a company spokesman said the community “represents Christiana’s entry into the retirement industry.”
Roberts, who is also chairman of Summit Savings & Loan of Plainview, Tex., became chairman as part of a management team elected by his S&L;, which owned 28% of Christiana.
At that time, Roberts indicated that Christiana’s goal would be to diversify from its main business, real estate.
Using income generated by the sale of industrial lots in Arizona, Christiana recently reported a loss of $9,000 for the quarter ended March 31. That compared to a $190,000 loss during the third quarter of the previous year.
Schwarz represented “a good opportunity with very favorable growth potential,” Roberts said, adding that Christiana wants to boost sales at existing stores and will consider adding stores.
Christiana may also try to expand Schwarz’s relatively meager share of the hotly contested and rapidly growing catalogue business.
“We don’t feel that area has been utilized to (the) fullest,” he said.
“F.A.O. Schwarz has been the most respected name in quality children’s toys for over a century, and current demographics suggest a favorable growth environment for this segment of the toy industry,” Roberts said.
When W. R. Grace & Co. bought the chain in 1969 from Parents Magazine Inc., it had 15 stores.
Franz Carl Weber International, owned by Franz Carl Weber III of Zurich, purchased 97% of Schwarz’s stock from W. R. Grace in April, 1975.
A spokesman for Weber said the remaining 3%--owned by the Schwarz family--also will be sold to Christiana as part of the agreement.
A New York attorney for Weber said that, until the third-generation toy store owner began liquidating holdings last year, Weber had owned the largest chain of retail toy stores in Europe, with locations in Switzerland, West Germany, Austria and France.